New Hampshire is about to enter the second year of its 2021-23 Triennial Energy Efficiency Plan without a firm budget in place, and EE industry members are concerned about the consequences for their businesses.

In a Nov. 12 order, the PUC threw out a proposed triennial plan and a settlement agreement that would have more than doubled spending, saying it placed “an enormous burden on New Hampshire ratepayers.” The PUC instead directed the state’s utilities, which developed the plan and administer the efficiency programs, to submit a new EE budget with spending “similar to the 2018-20 plan.” It also ordered system benefit charges funding the programs to decline by almost half by 2023 (DE 20-092).

The proposed triennial plan is the second installment under the state’s Energy Efficiency Resource Standard established in 2016.

Response to Order

New Hampshire stakeholders’ responses to the PUC order came in rapid succession in December.

On Dec. 7, the nonprofit Clean Energy NH (CENH) led a group of EE industry members in filing an emergency motion in New Hampshire Superior Court for a temporary injunction staying the order, calling the PUC’s ruling “arbitrary and capricious.”

The effect of the PUC’s order “defunding” the 2021-23 budget will “deprive all Granite Staters of the decreased electric and gas rates and decreased emissions of airborne pollutants that come from using energy efficiently,” the petitioners said.

CENH filed a companion complaint to its Dec. 7 emergency motion asking the Superior Court for immediate emergency relief to prevent layoffs in the efficiency sector and harms that “will imminently worsen prior to the holidays.”

State utilities have already suspended energy efficiency work orders, said a Dec. 6 affidavit of William Newell, owner of weatherization firm Newell and Crathern. If the PUC’s order stands, he said, the company will have to lay off most of its employees by the end of the year. Other businesses that work with the state utilities to provide program services said in affidavits that they have contracts for the New Year that are under threat if the PUC does not stay its order. A court date for the complaint is set for Dec. 27.

Eversource Energy (NYSE:ES), other state utilities and advocates and the New Hampshire Department of Energy (DOE) filed motions Dec. 10 for rehearing or clarification.

In orders on Dec. 6 and Dec. 13, the PUC provided some clarity on petitioners’ immediate questions about the order and stayed a Dec. 15 filing deadline, but it has yet to rule on the request for rehearing. The PUC has until Jan. 10 to respond to the rehearing requests.

New Budget

Under the settlement filed in December 2020, the utilities’ total 2021-23 budget request was $378.4 million, a $202.4 million increase over the 2018-20 budget of $176.2 million.

Proponents of the plan said the increase was justified because it would reduce energy costs and provide customer net savings.

Adopting the plan “will result in a net reduction of system costs for delivering energy services of more than $600 million,” said David Hill, managing consultant at Energy Futures Group, in October 2020 testimony on behalf of CENH. The bill savings for customers, he said, would be $1.3 billion over the three-year plan.

In the original plan, a bill impact analysis showed that the proposed three-year budget would reduce the utilities’ long-term revenue requirements by $470 million.

The PUC, however, said the budget goes against the commission’s preference for market-based mechanisms and proposed “ratepayer-funded energy efficiency that is entirely utility sponsored.” In addition, the commission determined that the utilities did not prove that the new budget is just, reasonable and in the public interest.

The commission ordered the EE programs funded for 2021-23 “at a level consistent with the previous triennial plan.”

The commission noted the energy efficiency portion of the system benefits charge (SBC) rose from 0.198 cents/kWh in 2017 to 0.528 cents/kWh in 2020, a 167% increase. The proposed settlement would have increased the charge to 1.259 cents/kWh for commercial and industrial customers and .863 cents/kWh for residential customers by 2023.

Instead, the commission limited the EE portion of the SBC rate for all rate classes to 0.528 cents/kWh in 2021, the same as 2020, declining to 0.373 cents/kWh in 2022 and 0.275 cents/kWh in 2023.

“While the overall level of the 2021–23 plan will be similar to the 2018–20 plan, consistent with the commission’s longstanding preference for gradualism in ratemaking, the rates set by the commission … will descend gradually year-on-year until they return to a reasonable level, and transition toward market-based programs,” the commission said.

It directed the utilities to identify EE programs “that provide the greatest benefit per unit cost with the lowest overhead and administrative costs within the approved budget and file a program proposal” for the commission’s review.

In compliance with the order, the utilities on Dec. 15 and Dec. 16 filed a new budget for the three years of $183.9 million. The new budget starts at $81.9 million for 2021 and declines to $44.9 million by 2023. But they said they “maintain all arguments and positions made in the joint motion for rehearing, clarification and stay” of the order.

State of the PUC

The PUC responded to the settlement proposal at the end of December 2020 with an order that maintained the existing budget until the commission reached a final decision. That final decision was expected by February 2021 but didn’t come until Nov. 12, nearly a year overdue for the January 2021 effective date of the 2021-23 plan.

Now, stakeholders are concerned that the commission’s final order on the plan only further delays implementation, hindering the utilities’ ability to continue funding programs and projects already in process.

CENH said that emergency relief is necessary because the PUC is “incapacitated,” and motions filed in the docket, therefore, might not reach a resolution until 2023.

Of primary concern to the petitioners is the commission’s ongoing flux since it became part of the newly formed Department of Energy in July. Newly appointed commissioners, CENH said, do not have the “institutional knowledge” necessary to rehear the case or have a conflict of interest.

The commission’s order was signed by then-Chair Dianne Martin, who resigned on the day of the order to take a job in the state court system and Commissioner Daniel C. Goldner, now the chair, whose term expires in 2025.

Carlton Simpson, a former attorney for utility Unitil was confirmed by the New Hampshire Executive Council on Nov. 10 to complete Martin’s term. Commissioner Pradip Chattopadhyay was appointed in December to a full six-year term expiring in 2027.

The state’s consumer advocate told the PUC in September that Chattopadhyay should not participate in triennial plan proceedings due to his prior work in the advocate’s office at the docket’s start in 2020. Chattopadhyay, who received approval for his seat earlier this month, filed a memorandum in the docket on Tuesday saying he would not recuse himself from the case. He worked as a senior advisor for the commission from August to December.

His work at the advocate’s office, he said, did not include access to information related to the plan that would be inappropriate to know as a commissioner. The Consumer Advocate, however, filed a motion on Friday seeking Chattopadhyay’s disqualification from participation in the docket, saying his position was high ranking in the advocate’s office and as such, he would have been privy to docket details in both formal meetings and informal conversations.

Governor’s Input

In a Dec. 14 letter to DOE Commissioner Jared Chicoine, Gov. Chris Sununu applauded the DOE for seeking a rehearing, but he also agreed with the PUC’s assessment of the settlement agreement.

“Had the proposed settlement agreement in this docket been approved, New Hampshire’s ratepayers would have seen significant increases to the system benefits charge — increases as high as 168% for some commercial and industrial customers over the 2020 rates,” he wrote.

The order, he said, also presented operational complications for the state’s energy efficiency programs, saying there are “legitimate questions” about the effect of the order for state programs in the “very near future.”

Sununu urged the PUC to address stakeholders’ concerns about the order.